Dive Brief:
- The Massachusetts attorney general added amendments last week to a settlement regarding Boston-based Partners HealthCare's proposed acquisitions of South Shore Hospital in Weymouth and Hallmark Health System in Melrose. The acquisition has faced criticism that it has the potential to increase healthcare costs.
- The original settlement limited Partners' ability to increase prices only to general inflation in its entire network through 2020. The update requires prices at Hallmark to be capped for the next six-and-a-half years. Price increases will be limited to the lower of general inflation or medical inflation.
- The original agreement also limited Patners' ability to joint contract with commercial payers. The company must also maintain psychiatric and behavioral health services at both acquired hospitals for five years. Two other provisions of the proposed agreement include addressing out-of-network patient referrals in its new technology system and a review of its commercial risk business.
Dive Insight:
The Boston Globe previously reported that the takeover would increase spending between $15.5 million to $23 million. Partners claimed it would decrease costs by $21 million a year for five years. Hearings will continue on the potential acquisition this week. This is just the most recent scrutiny of anti-competitive hospital mergers and acquisitions and their potential for increasing prices. The FTC has been increasingly successful in its efforts to block deals which it sees as anti-competitive. For example, it won three cases regarding hospital mergers in the last two years, in Albany, GA, Toledo, OH and Rockford, IL, and just prevailed in its first ever case challenging a health system buyout of a medical practice in Idaho.
But providers don’t appear to be deterred by the increased examination: According to a survey of 50 corporate and private equity players in the health and life sciences industry this summer, more than 85% of respondents said they expect merger and acquisition activity to continue to increase next year.
Want to read more? You may enjoy this story on two NC hospitals that recently created an alliance; or this story onthe groundbreaking Anthem Blue Cross HMO-ACO hybrid.